The latest MFS Investment Management DC Pulse survey found over half of workers believe they will need to save more than initially planned for retirement, and another half say they’ll have to work longer.
The COVID-19 pandemic and its financial effects has increased retirement anxiety for workers, MFS finds, as 65% say they will need to save at a higher rate for their long-term future, and 52% think they will need to work longer than planned.
As a result, 38% of survey respondents say that not saving enough for retirement is either their most or second most significant source of financial stress.
More workers want emergency savings vehicles
The findings come as 32% of workers say they cannot afford a $400 emergency expense, MFS reports. Fifty-five percent of respondents to the study say that if given $1,000, they would add it to their emergency savings as opposed to another option.
Yet, emergency savings benefits continue to be offered by less than half of companies. Forty percent of employers surveyed say they currently offer emergency savings features, with 33% saying they may add it and 12% responding that they likely will incorporate the feature to their plan.
This is compared to 77% of plan sponsors who offer financial planning benefits, 71% who provide budgeting and debt management, 70% who offer health care and health savings accounts (HSAs), and 33% who provide benefits to assist with student loan debt.
In its report, MFS notes how recent provisions brought on by SECURE 2.0, including emergency savings and student loan debt assistance, may incentivize more employers to add such features to their workplace plans.
Under SECURE 2.0, participants may withdraw up to $1,000 per year from their retirement savings without being subject to an early withdrawal penalty, and starting in 2024, employers can make matching contributions to a defined contribution (DC) plan on qualified student loan payments.
SEE ALSO:
- How SECURE 2.0 Validates Emergency Savings Initiatives
- 8 Ways SECURE 2.0 Will Enhance Retirement
- 6 Important SECURE 2.0 Provisions Retirement Advisors Should Know